FocusCorrected: US government shutdown could delay cracker air permits

01 October 2013 22:29[Source: ICIS news]

Correction: In the ICIS story headlined “Focus US government shutdown could delay cracker air permits” dated 1 October 2013, the incorrect number of essential staff for the EPA was listed. The second paragraph should read that the EPA would be stripped down to just 1,071 essential staff, not 872. This represents 6.6% of the total staff, not 5.4%. Likewise, paragraph 15 repeated the incorrect figure for the total staff. It should read over 6% of its staff, not 5%. A corrected story follows.

(adds Formosa comments, paragraph 7)

By Joseph Chang

NEW YORK (ICIS)--The US government shutdown could delay petrochemical companies securing air permits from the Environmental Protection Agency (EPA) to proceed with the construction of new crackers.

The EPA will be stripped down to just 1,071 essential staff during the shutdown, which began on 1 October. This represents just 6.6% of total staff of 16,205 before the shutdown, the agency said in its Contingency Plan for Shutdown on 1 October.

In the US, there are plans to build seven new ethane crackers – six on the US Gulf Coast by 2016-2017 and one in Pennsylvania with an unspecified timeframe.

Among the six on the US Gulf Coast, only Chevron Phillips Chemical has secured the necessary federal and state air permits to start building a new cracker.

Companies must submit applications for Greenhouse Gas (GHG) Prevention of Significant Deterioration (PSD) air permits to the EPA for their projects and typically are in frequent dialogue with the agency on a range of issues prior to approval.

"EPA is just one of the affected agencies. So, for the time-being, we are still assessing its impact on our permitting efforts while continuing to proceed with our internal efforts and other tasks," said Steve Rice, spokesman for Formosa Plastics.

“We are continuing to make good progress with EPA Region 6 on moving the air permit forward for approval,” said ExxonMobil Chemical spokesman Russ Roberts.

He would not comment on any impact of a government shutdown.

ExxonMobil is planning to build a 1.5m tonne/year ethane cracker in Baytown, Texas, with start-up planned for late 2016.

However, a prolonged US government shutdown could cause delays in the permitting process, impacting all companies seeking to build new petrochemical projects.

According to the US Clean Air Act, “the EPA is required to make a permit decision on a PSD permit application within one year after the application is complete as determined by the EPA”, as reiterated in a 15 October 2012 EPA memorandum on the “Timely Processing of PSD Permits when EPA or a PSD-Delegated Air Agency Issues the Permit”.

While the EPA by law has one year to make a decision, its goal is to make a decision within 10 months of the application being deemed complete, it said in the memorandum.

ExxonMobil’s PSD air permit application to the EPA for its new Baytown cracker was deemed complete in December 2012.

EPA progress on air permits is likely to grind to a halt as the agency operates with just over 6% of its staff during the shutdown.

The EPA’s Office of Air and Radiation, which deals with these permits, will be particularly hard hit.

This office employs 1,177 staff and will be down to just 17 excepted staff and zero exempted staff during the shutdown, representing 1.4% of full staffing levels.

“Excepted personnel are excluded from furlough during shutdown but only for the hours/days it takes them to perform their excepted activities,” said the EPA in its contingency plan.

Excepted staff activities would include those related to an imminent threat to public health, noted the EPA.